FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the second quarter ended June 30, 2010.

For the quarter, revenues decreased to $349.0 million from $360.5 million in the prior year period. Earnings per diluted share were $0.52 compared to $0.69 in the prior year period. Adjusted EBITDA was $65.5 million, or 18.8% of revenues, compared with $84.6 million, or 23.5% of revenues, in the prior year period. Adjusted EBITDA and Adjusted earnings per diluted share (which appear in the accompanying tables) are non-GAAP measures and are described in further detail below.

For the quarter, the Company generated $49.2 million in cash from operations. As of June 30, 2010, the Company had $123.3 million of cash and cash equivalents, compared to $80.9 million as of March 31, 2010. During July 2010, the Company repurchased approximately 336 thousand shares of its common stock.

Commenting on these results, Jack Dunn, FTI's president and chief executive officer said, "Our second quarter results were consistent with the preliminary figures we announced in early July. Across our businesses, we continue to experience the impact of an unevenly recovering economy. On the positive side, Economic Consulting and Strategic Communications each generated double digit growth in revenue and Adjusted Segment EBITDA. Forensic and Litigation Consulting also had nice growth despite a continuing soft environment for litigation. At the same time, concerns about the strength of the economic recovery, volatile financial markets and a lack of visibility into the impact of future tax and regulatory policies have undermined business confidence and dampened corporate decision making. The result has been soft demand for our pro-cyclical activities, such as capital markets and M&A, and a significant reduction in the pace of restructuring and bankruptcy activity that, while having stabilized in the quarter, is below the record levels experienced a year ago."

In a separate press release, FTI announced reaching an agreement in principle to acquire FS Asia Advisory Limited, a leading Hong Kong based financial advisory firm.

Second Quarter Segment Results

Corporate Finance/Restructuring

Revenues in the Corporate Finance/Restructuring segment were $111.1 million, compared with a record $134.0 million in the second quarter of the prior year. Adjusted Segment EBITDA was $26.0 million, or 23.4% of segment revenues, compared with $47.4 million, or 35.4% of segment revenues, in the prior year quarter. The decline was due to lower demand for restructuring services resulting from the improvement in high yield markets and the economy, and deferral of some creditor activity pending a clearer prospect for the economy.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased 5.8% to $80.8 million from $76.3 million in the second quarter of the prior year. Adjusted Segment EBITDA was $19.3 million, or 24.0% of segment revenues, compared to $20.9 million, or 27.3% of segment revenues, in the prior year's second quarter. The segment's core business continues to be affected by restrained corporate litigation budgets and uncertainty regarding regulatory enforcement activity. The segment saw growth in Regulated Industries - insurance, financial services, healthcare and pharmaceuticals -, and in Trial Services and Asia Pacific investigations, while revenue from the large financial fraud cases that began early last year declined. Adjusted Segment EBITDA margins declined year over year due to increased costs associated with employee hires in anticipation of higher demand for services in litigation and regulatory matters.

Economic Consulting

Revenues in the Economic Consulting segment increased by 13.0% to $64.6 million from $57.1 million in the second quarter of the prior year. Adjusted Segment EBITDA increased to $11.5 million, or 17.7% of segment revenues, compared to $10.3 million, or 18.1% of segment revenues, in the prior year quarter. Revenue growth was driven by strong activity in the Financial Economics and Network Industries practices, and continued maturation of European operations.

Technology

Revenues in the Technology segment were $42.8 million, compared to $48.5 million in the second quarter of the prior year. Adjusted Segment EBITDA was $15.9 million, or 37.1% of segment revenues, compared to $19.2 million, or 39.5% of segment revenues, in the prior year quarter. Revenue performance in the quarter reflected a decline in M&A 'second request' activity and unit based pricing partially offset by higher consulting revenue, including significant litigation activity.

Strategic Communications

Revenues in the Strategic Communications segment increased 11.9% to $49.8 million from $44.6 million in the second quarter of the prior year. Organic growth in the segment was 9.1%. Adjusted Segment EBITDA was $8.6 million, or 17.3% of segment revenues, compared to $5.9 million, or 13.2% of segment revenues, in the prior year quarter. The segment experienced growth in project-based work despite the continued slow environment for discretionary corporate spending and moribund capital markets. The segment also experienced the third consecutive quarter of net annualized retainer wins. Adjusted Segment EBITDA margins improved significantly from the 2009 level due to the higher revenue levels and the positive impact of cost reduction initiatives undertaken in the second half of 2009.

Second Quarter Conference Call

FTI will hold a conference call for analysts and investors to discuss second quarter financial results at 9:00 AM Eastern Time on Thursday, August 5, 2010. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website, www.fticonsulting.com.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,300 employees located in most major business centers in the world, we work closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. More information can be found at www.fticonsulting.com.

Use of Non-GAAP Measure

Note: We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. We define Adjusted Segment EBITDA as the segment's share of consolidated operating income before depreciation, amortization of intangible assets and special charges plus non-operating litigation settlements. We define Adjusted earnings per diluted share (Adjusted EPS) as earnings per diluted share excluding the per share impact of the special charges that were incurred in that year. Although Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in our industry. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee incentive compensation.

Adjusted EBITDA, Adjusted Segment EBITDA and Adjusted EPS are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. These non-GAAP measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income. Reconciliations of operating profit to Adjusted EBITDA, segment operating profit to Adjusted Segment EBITDA and EPS to Adjusted EPS are included in the accompanying tables to today's press release.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," expects," anticipates," "projects, "plans," intends," "believes," "forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved or that actual results will not differ from expectations. The Company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this will occur from time to time in the future. The Company's actual results may differ from our expectations. Further, preliminary results are subject to normal year-end adjustments. Other factors that could cause such differences include the current global financial crisis and economic conditions, the crisis in and deterioration of the financial and real estate markets, the pace and timing of the consummation and integration of past and future acquisitions, the Company's ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described under the heading "Item 1A. Risk Factors" in the Company's most recent Form 10-K and in the Company's other filings with the Securities and Exchange Commission. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(in thousands, except per share data)

(1) We define Adjusted EBITDA as consolidated operating income before
depreciation, amortization of intangible assets and special charges
plus non-operating litigation settlements. We define Adjusted
Segment EBITDA as the segments' share of consolidated operating
income before depreciation, amortization of intangible assets and
special charges plus non-operating litigation settlements. Although
Adjusted EBITDA, and Adjusted Segment EBITDA are not measures of
financial condition or performance determined in accordance with
generally accepted accounting principles ("GAAP"), we believe that
these measures can be a useful operating performance measure for
evaluating our results of operations as compared from period to
period and as compared to our competitors. EBITDA is a common
alternative measure of operating performance used by investors,
financial analysts and rating agencies to value and compare the
financial performance of companies in our industry. We use Adjusted
EBITDA and Adjusted Segment EBITDA to evaluate and compare the
operating performance of our segments and it is one of the primary
measures used to determine employee incentive compensation.
Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the
same manner by all companies and may not be comparable to other
similarly titled measures of other companies unless the definition
is the same. These non-GAAP measures should be considered in
addition to, but not as a substitute for or superior to, the
information contained in our statements of income. See also our
reconciliation of non-GAAP financial measures.
(2) The majority of the Technology and Strategic Communications
segments' revenues are not generated on an hourly basis.
Accordingly,
utilization and average billable rate metrics are not presented as
they are not meaningful. Utilization where presented is based on a
2,032 hour year.
(3) Effective January 1, 2010, we implemented a change in our
organizational structure that resulted in the movement of our
Financial and Enterprise Data Analytics subpractice from our
Technology segment to our Forensic and Litigation Consulting
segment. This change has been reflected in our segment reporting for
all periods.

(1) We define Adjusted EBITDA as consolidated operating income before
depreciation, amortization of intangible assets and special charges
plus non-operating litigation settlements. We define Adjusted
Segment EBITDA as the segments' share of consolidated operating
income before depreciation, amortization of intangible assets and
special charges plus non-operating litigation settlements. Although
Adjusted EBITDA, and Adjusted Segment EBITDA are not measures of
financial condition or performance determined in accordance with
generally accepted accounting principles ("GAAP"), we believe that
these measures can be a useful operating performance measure for
evaluating our results of operations as compared from period to
period and as compared to our competitors. EBITDA is a common
alternative measure of operating performance used by investors,
financial analysts and rating agencies to value and compare the
financial performance of companies in our industry. We use Adjusted
EBITDA and Adjusted Segment EBITDA to evaluate and compare the
operating performance of our segments and it is one of the primary
measures used to determine employee incentive compensation.
Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the
same manner by all companies and may not be comparable to other
similarly titled measures of other companies unless the definition
is the same. These non-GAAP measures should be considered in
addition to, but not as a substitute for or superior to, the
information contained in our statements of income. See also our
reconciliation of non-GAAP financial measures.
(2) Effective January 1, 2010, we implemented a change in our
organizational structure that resulted in the movement of our
Financial and Enterprise Data Analytics subpractice from our
Technology segment to our Forensic and Litigation Consulting
segment. This change has been reflected in our segment reporting for
all periods.